Listen to Victoria, Jeremy, and Patrick Talk Economic Forecasting Here:
With business leaders facing volatile headlines and uncertainty heading into 2026, understanding the real economic signals has never mattered more. Principal Economists Jeremy Bess and Patrick Luce of Stantec join host Victoria Meyer to break down the trends shaping the chemical industry, from the current state of macroeconomic headwinds and tailwinds to the impact of policy moves, interest rates, and global demand. Together, they discuss how companies can separate data from sentiment, apply scenario planning, and stress-test their outlooks in a dynamic marketplace.
Victoria, Jeremy, and Patrick explore the hard financial data leaders should be monitoring—ranging from bookings, backlogs, and billings to corporate profitability and the health of the consumer. They highlight how strategic pricing, scenario analysis, and a keen eye on the bond market can help chemical leaders build resilient plans for 2026 and beyond. The episode wraps with practical leadership advice for navigating unpredictability and maintaining confidence during uncertain times.
Victoria, Jeremy, and Patrick discuss the following:
- 2025–2026 Chemical Outlook: Modest growth expected and key market signals for decision-makers.
- Strategic planning approaches for uncertain economic conditions and scenario testing.
- How tariffs, taxes, and regulations in major markets impact chemicals.
- Data Over Hype: Focus on financial metrics (bookings, backlogs, billings) vs. market sentiment.
- Leading Through Uncertainty: Practical strategies for confident leadership during volatile times.
Killer Quote: “The US economy is an aircraft carrier. It does not turn on a dime. So all these signals have been manifesting throughout the course of this year suggesting modest, mild growth for 2025. And what Jeremy and I have been telling our clients to plan for is additional modest mild growth in 2026.“ — Patrick Luce
Watch The 2025/2026 Economic Forecast Here:
2026 Strategy Starts Now: Economic Forecasts for Chemical Executives
Welcome back to The Chemical Show, Where Leaders Talk Business. Today, I am spotlighting a pair of speakers who are going to be at The Chemical Summit in 2025. If you like what you hear, you are definitely going to want to join the conversation in person, to be part of all the conversations. The Chemical Summit this year is on September 30th and October 1st in Houston, Texas.
Visit thechemicalsummit.com for more information.
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So onto our guests. I have the honor of speaking with Jeremy Bess and Patrick Luce, who are both principal economists at Stantec. Jeremy and Patrick are coming to The Chemical Summit this year to talk about economics and how all the trends that we’re seeing are affecting the chemical industry today.
We’re gonna get a little bit of an insight into that. We’re sitting here midyear 2025. Leaders all across every industry are looking ahead to figure out what’s gonna happen, putting together their business plans and their budgets and their forward thinking for 2026. Yet we’re still wondering how 2025 is gonna play out. So that’s always an interesting debate and we’re gonna talk about that and more today. Patrick and Jeremy, welcome to The Chemical Show.
Jeremy Bess: Thanks for having us.
Yeah, super excited to have you here. Super excited to have you guys back at The Chemical Summit this year. At least it’s back for Jeremy. So Patrick will be a new addition to this, which is gonna be great for me and for all of our attendees and people there. So glad to have you guys be a part of this. Let’s just start with origin stories. Patrick, let’s start with you, how did you get interested in this wonderful world of economics that brought you to where you are today?
Patrick Luce: Well, honestly my family is grounded in the trades, so my grandfather did floor covering, my dad does floor covering, his brothers, my uncles, do floor covering and a few cousins are doing floor covering. They tell me my hands are too soft, so I had to find a different field. And so I went to college and ended up falling in love with economics and patterns and trends because of the relationship that has on the trades industry and construction and manufacturing, all those things. So I love a good puzzle and I think economics is the puzzle for my soft hands.
That’s awesome. Jeremy, how about you?
Jeremy Bess: I got into economics actually in my sophomore year of high school. There was a professor Thomas Gilroy, so shout out to him. He was basically like, “Hey, you’re failing. You have a lot of energy. Maybe stop putting it into going to your car and cranking music really loud to bother everyone and maybe do an extracurricular activity?” So he put me in a business competition/economics competition. We literally traveled around the state doing live questionnaires, and you get x amount of points for getting them right. Then you compete with other schools. So we did this for like months.
In highschool?
Yeah, so shout out to Thomas Gilroy for getting me into economics. It wasn’t until probably sophomore year of college when I was like, okay, I’m really committing to this as a degree and likely to this as a profession, and it just blossomed from there.
Awesome, that’s really interesting. In fact, one of my daughters is starting out in economics in college. She’s heading off to her freshman year at Texas A&M, starting as an economics major. And I’m like, economics is gonna be great. And she’s says we’ll see. In her case it’s a pathway to the business school. So I’m definitely gonna have her listen to your interview, so it better be good.
Jeremy Bess: If it’s bad, I blame Patrick. How about that?
Oh, that’s good, it’s good to have somebody to blame. So we are deep into 2025. Annual planning cycles are in full swing, and yet we’ve got lots of volatility, lots of noise in the headlines. As we record this, the news of the day is that the US and Europe have reached some form of agreement on tariffs. But in the meantime, with all this uncertainty, how do we plan? What is the advice that you guys are giving to your clients as they try to make sense of where we are today?
Jeremy Bess: I’ll maybe lead off with this and then, we can do the classic tag team. What’s fun about this Victoria is I’ve known Patrick now for 15 years. I’m Uncle Jeremy to his kids, I don’t go so far as we finish each other’s sentences, we try to, but we do share a wall. So thank God for this wall or else we’d just throw things back and forth at each other. So Pat, imagine me throwing something at you, I’m gonna go first.
When we start thinking about planning and, yes, we’re mid-year and a lot of folks are doing it now or they’re heading into the fall planning and thinking about 2026. I think the big thing though, that we deal with or that a lot of the conversations we’re having with clients is from a macroeconomic lens. So yeah, we can go to our sales team and poke and prod to find out what they’re feeling and what we’ve done in the last six months.
Are we gonna catch up? Are we swimming upstream or downstream? That is where we come into play and is where those conversations maybe in our opinion, where they should start is, what we’re doing or where we’re going in the next six months is important, but where’s the macro going? Are we dealing with headwinds or are we dealing with tailwinds within maybe our four walls, maybe the US, maybe as a globe. We’re all being impacted by these things. Our thought is best plans are built right here, understanding the environment that we’re operating in.
So we start thinking about those markets. So again, from our perspective, the best plans as we head out into the future is really from that broad trend level. But I’ll let Pat kind of circle in here and see if I miss anything on that.
Patrick Luce: Fundamental timing is everything. Are you swimming upstream or downstream? So many examples of businesses that put together these amazing, incredible plans, but at the wrong moment and wrong instant of time. I think one that Jeremy and I like to talk about is you think back to technological improvements and everything that we’ve done over the past couple of decades. What we love today, and I know I love this today, is I can go on my phone and click and get my Walmart order delivered to my house in 24 hours. Amazon’s right around the corner, so is Kroger or Uber Eats and all these things just at a button click. But really when we think about the planning that goes into that. This was not a new concept. We can date all the way back to the late 1990s and there was a company called Webvan.
Jeremy Bess: Yeah, Webvan.
Patrick Luce: They thought it was time to deploy this idea of online grocery. So they received all this funding and they had an IPO and they had tons of equity. Then you have this dot-com burst, and then you have unraveling of the economic environment that was right around the corner and they went on bankrupt in 2001. Maybe the consumer wasn’t ready for it, but also the economy was not at the right moment for that level of investment. It’s a great idea. Just wrong timing.
You’re right. Timing is everything. Like the stock market, timing is everything. So how does this play out when we’re looking at, how to plan out the year? What are you seeing? Are we facing tailwinds or headwinds, or is it a swirling dervish?
Jeremy Bess: Pat and I went to Istanbul a couple months ago, so it’s funny you say that. I never knew what that was until recently. I would say if you logged onto any periodical in the last couple months, you would say, oh my gosh, I don’t know. I think what’s funny about that is, I don’t know why this became a thing maybe over the last six months, but probabilities of something happening is what I’m starting to see. So like recently the probability of recessions spiked, right? April happened, we saw this giant spike and the probability of a recession happening in the US. Then two months later it falls off, it comes back down. But I don’t even know what a probability of a recession of 45% means to 55% back down to 30%.
I don’t even know what that meant and I work in this world! Economics is our world and we’re doing forecasts for the macro-economy. So I think when you take a step out, it definitely feels like there’s a lot of moving parts, a lot of uncertainties. That’s the word I hear quite often. Yes, that’s there. But okay, take a step back. If we park elections last year, we park the tariffs, and I know these are big things to say, you can’t just park those. But there are general trends that as we were heading out of last year into this year that still hold true. You could be looking or companies can be looking at the same data in the same way. So I’ll talk a little bit about macro pieces in one second, but just so you all know, when you are working in your four walls, there’s the same metrics you use. Bookings, backlogs, and billings.
The three Bs of business. It’s similar to what Pat and I are looking at, but maybe not that small. We look at new orders, so think of that as bookings. We look at backlog, think of that as the kind of pent up there. And then maybe we start to look at things like profitability and such as the billings. So we look at all that data and we go, hang on, there were positives happening as we head out of last year and we headed into this year. Again, if we think of that as just saying new orders even just June of this year, is year over year growth of around 13% on durable goods. This is double digit growth in durable goods. That’s really quite high. Yet we’re going, oh my gosh, the world’s ending and probabilities of recession peaked. And you say, yeah, but that trend of growth was already happening. Backlogs, right? So again, unfilled orders also cyclical rise, so things are getting better. Also year over year growth is 7% I believe if we look at June of 2025. So we have new orders looking pretty good. Backlogs are pretty good. Then we have to pivot and say, okay, but what about the billings? Are we getting money, profitability? Profitability is up in the US and again, there’s multiple ways of looking at it.
Non-financial, corporate profits, we look at excluding taxes, all these things. Go ahead, look at it in multiple lenses. We’re still talking about year over year growth. If we think about the non-financial side, you’re looking at Q1 growth, it was 8%. That was Q1 of this year, and that was right around the time where everyone thought the world was ending. Before we dive into any other concepts, we’re suggesting already that 2025 was looking to be a reasonable year and we’ll caveat that and put it into context maybe in a little bit. But just to start off there, those three pieces are not too shabby. I’m sure Patrick’s biting at the bit here to say, okay wait, there are other things that suggest where we’re gonna round out this year and where we’re probably heading into 2026.
Patrick Luce: He is a fire hose of information, but we aren’t dancers. We have two less feet, so no whirling and dervish on our ends, but with that said, there is a lot of optimistic information that we see showcasing throughout the remainder of 2025. The US economy is an aircraft carrier, it does not turn on a dime. So all these signals have been manifesting throughout the course of this year suggesting modest mild growth for 2025, and what Jeremy and I have been telling our clients to plan for is additional modest mild growth in 2026. That’s not to say there aren’t headwinds, there are absolutely headwinds showcasing themselves for 2026. We are highly scrutinizing our outlooks for 2026 based on these. So this is where you do come in and say, what are some of those measures? What are some of the things that we can peak out into the future? The leading indicators into that year?
Again, it is mixed and that makes the economist job very difficult. It’s easy to be pessimistic and say, if I’m pessimistic and I’m right, then I’m right. And if I’m pessimistic and I’m wrong, then things are great, but that’s not helpful for planning. So we do want to be very mindful what our forecast for 2026 is showcasing, and that is underpinned by a lot of these longer term indicators, like the bond market, like the money supply, like global liquidity.
Yeah that’s interesting. Let’s just put a quick global lens on this. So modest growth in the US and we can probably roll Canada and North America into that ’cause we all seem flow the same way. How are you seeing the global effects? We have a lot of conversation about what China is and what China is not, what Europe is and what Europe is not. Anything stand out there?
Jeremy Bess: I think the one piece is just to that point, the world is being impacted by what we do within the world. So we’re all impacted. What happens overseas impacts us, what happens to the US impacts overseas, so on and so forth. You think about Canada, if you go back a year ago and say, what the US is doing, and what Canada is doing are gonna play out and they’re performing a little bit worse, maybe because of some of the trade implications or they’re highly dependent on commodities and things like that, which is gonna impact them worse. But if we think about business cycles and we think about how most of the world was in cyclical decline last year heading into 2025. Most of the world still is, but then you go, okay, we don’t live down there. We don’t live in contraction or just slowing growth forever. There’s a point at which you hit a bottom and you start to rise again. So even just from that perspective, it would be abnormal to continue on this trajectory another year.
Heading into 2026 you think about Europe again. Some nations are year over year growth contracting. It depends on how you’re looking at your GDP measures or production measures. Generally though, a lot of those countries are dealing with contraction just like the US. If you think about how the manufacturing side of the US was already doing towards the end of last year as we headed into early this year, and now all of a sudden you’re starting to see very modest year over year growth levels. But we still surpassed the zero line, and yet we’re all going, ah, things are really negative, blah, blah, blah. Okay, but we’re starting to see that cyclical rise, not just in the US but in other places. Keeping an eye on China, right? Huge economy, largest manufacturer in the world. We’re second, by the way, in the US, but still really big.
Still understanding where that’s going is important, but there’s a lot at play. You think of Europe heading into cyclical rise. You think of the US heading into cyclical rise again, Canada lagging a little bit. This go around probably more impacted by these trade implications and commodities. But globally, we should start seeing these things. You’re seeing interest rates slowly drop in Europe. You’re seeing global liquidity starting to really ramp up. And I think if I was to pick one good green indicator, I would say that one is looking good for the next six to 12 months.
The global liquidity?
Jeremy Bess: Yeah.
Hey, Patrick, what’s your take on this? Are you and Jeremy aligned on this piece of it?
Patrick Luce: We absolutely are. We try not to be the two handed economist, but we do tell folks to stress test their outlooks. Testing is to run scenario analysis and make sure that they’re planning for “what-if” scenarios. We come in with a base case scenario based upon structural trends, real hard data. But gosh, you do need to have contingencies in place. What executive strategies, what management solutions can you be deploying to be a bit more resilient to plan? I think a big piece of that is to run business case analysis to say, should I be making my investments?
The interest rate environment has been pretty sticky in the United States and globally. You look at central banks, they’re easing and softening, but we are in a higher rate environment than we’ve experienced in quite a bit of time. So now there needs to be more scrutiny. We’re not saying don’t invest, but we are saying make sure that you are running your analysis. Make sure you’re looking at the business case, looking at the return on investment in evaluating alternatives. Then if you think about trying to shrug off some of those headwinds, it is finding new ways to grow, whether it’s diversifying product streams or leveraging new markets of interest. What sorts of diligence should you be doing today to better prepare for 2026?
Yeah, that’s great. In fact, I know you guys work broadly across industries, but that’s some of the very same things that I’ve been advising chemical companies to do and that the successful chemical leaders I’ve been talking with have been doing. We talk about scenario planning coming into 2025. A whole lot of uncertainty around tariffs, it appears that tariffs are settling down, or at least becoming known here in 2025. Alas, there’s always room for change, but understanding how you’re gonna respond in different environments ’cause of course, things change along the way.
I think one of the things that’s interesting and this falls definitely into the economist camp, in my opinion, which is around policy influences. So I think if we look at what’s happened this year a big policy influence has been not just around tariffs, but around a changing point of view, both US and Europe, around energy. Energy subsidies, the role of sustainability and more. What are the big policy pieces that you guys are watching as you try to think about how this world may evolve and move forward?
Patrick Luce: Yeah, I think the big one is obviously in the United States. We were talking about the tax bill, The Big Beautiful Bill that just got unleashed a couple weeks ago. I think there’s a lot to unpack in there. You can think about just the near term effects of that and the long term effects of that. From that economic lens, there’s a lot of policies in place intended to juice innovation, intended to juice investment into the US economy, intended to try and stimulate growth. That bodes well for some of those tailwinds for 2026. We don’t have a full formalized analysis on every single policy that’s in there yet, but it’s one that we’re diving into.
When we think about what it means from a government standpoint to try and extend tax price or extend tax cuts or also increase government spending and offer further incentives into R&D, all of that is intended to spur the economy, add growth. Again, the consequence of that is more long term. Thinking about some of the more structural components of our economy is increasing deficit spending and at an increasing rate and what that means for challenges in headwinds further out into the back half of this decade. When we talk about debt to GDP ratio growing, and I think one that is of even more interest to Jeremy and I is, what’s going on with interest payments from the federal government?
You’re now having all these additional dollars being spent on past production, not for production. And I say past, past will be 2026 production. So you have all these interest payments blowing right through a trillion dollars and further beyond that, and the interesting measures when you look at interest payments as a percentage of defense spending. The Hoover Institute has a really interesting piece on that measure specifically that says, once interest payments from a federal government budget exceeds defense spending, meaning it’s above 100% defense spending, you start to see a more tricky geopolitical climate.
You can look at like late-1500s Spain, the Habsburgs ran into that late-1700s, France and Napoleonic era, and then even Britain, the challenges that they faced at the end of the 19th and into the 20th century. So it’s a very interesting measure, one that is on our minds as we peek into the future and say, what’s happening to our deficit spending at higher interest levels and what does that mean for just a tensor geopolitical situation?
How close are we getting from an interest versus defense perspective?
Jeremy Bess: We did exceed it.
Patrick Luce: Yeah we are above 100%. So that’s kind of that trigger point that says, gosh, now there’s some more risk of geopolitical challenges.
Got it. That’s interesting.
Patrick Luce: Jeremy’s got the optimist hat on, and I’ll come in with a little bit more grounding information, but something that we think about.
Jeremy Bess: I think what ends up happening is I’m just more optimistic no matter what phase we’re in of the business cycle. So Pat mentioned deficit spending and we go, okay, what does that do? That long term can increase inflation. More money chasing the same amount of goods. That puts upside pressure on pricing. Like these are core things that are happening, but at the same time, that could bolster sales. Now profitability is a whole other thing, but if you start to think about, what it can do to sales, that can buffer some levels of growth. Shout out to those folks that are doing their 2026 planning and only looking at the top line. Please, drill into your P&L. There’s some magical things that happen. All of a sudden you go, oh geez, I’m that early 2000s company who unfortunately went bankrupt. Webvan, I believe, right Pat? That’s what it was called?
Patrick Luce: Yep, Webvan.
Jeremy Bess: When I think about the chemical industry, the inflation’s already happening. We’re starting to see the producer price index for chemicals and allied products, it’s kinda a broad measure of chemicals. It was negative as we were in 2024. We’re starting to get a little bit positive as we head into this year. It’s bouncing around the zero line. Our outlook as we head into 2026 is more inflation. Our outlook into 2027 is similar to that. So we’re talking about higher levels of inflation as well. He’s painting the picture that this deficit spending is an issue. And yes, it absolutely is likely one of those levers that will drive higher levels of inflation..
Yeah, so higher inflation related to the chemical industry. Good for pricing, bad for volumes. Is that the way to think about it?
Jeremy Bess: I think the hardest part companies are gonna have trying to pass on is the raw pricing of commodities that we’re expected to have an increase on and pass it on to your clients and customers in a very meaningful way. I think gone are the days where you just slap broad percentages to it and you call it a day. This is on the heels of some of the highest levels of inflation we’ve dealt with in decades. So smart strategic pricing is probably gonna be something that I think folks are gonna have to put more of an eye on than maybe they have probably in the last 20 years, and maybe more bites more often. So you’re not doing these sticker shock moments to your customers, small bites more often. Not that we’re saying to dupe your clients, but small bites more often lets people deal and have a larger appetite for accepting those price increases.
It’s a common thing that the restaurant industry will generally try to do.
Yeah, absolutely. I think that’s one of those areas that people are talking about today, how do they adjust and accrue pricing appropriately? How do you create value beyond pricing? Because of course, one of the challenges across the industry is that there’s a lot of oversupply depending on what part of the market you’re in. So you know costs are going up, demand is going down. You’re in the squeeze because of the oversupply. So finding the right paths through it, and yet you still want to be covering your costs. As an employee, you still would like to make more money next year. You would like to still have some of the same perks, whether it be travel benefits, or other things. There’s a lot of factors that go into play into all of it, just in terms of this whole decision making process.
Jeremy Bess: Yeah. If I can just say though, again it’s maybe hard for me to not be somewhat optimistic in the more intermediate term. You just mentioned the wage aspect of it. So the health of the consumer, right? Wages are pretty strong, even if you adjust them for inflation. You’re talking about real median earnings, year over year growth of 3.5% that’s on top of inflation. So I guess that’s another green check to say the US consumer is, broadly speaking, what drives most of the US economic growth. So you look at the consumer, how they’re doing, even financially, delinquency rates, not too shabby. Wages pretty darn good. That should support some levels of positive outlook as we head into 2026. So just layering that on a little bit there to further give evidence for the growth side. So that maybe will offset some of the downside pressures that inflation will inevitably have on your P&L.
We talked before when we were doing our little prep around how you guys really look at hard financial data, and less on sentiment indicators when you’re making forecasts. So you’ve already talked about, we’re now looking at the likelihood of a recession and probability models, which somewhat seem sentiment based. I think it’s maybe trying to make something that’s a sentiment more of a hard number. But what’s the hard financials that you guys are looking at when you’re looking at what’s going on in the market?
What should chemical leaders be looking at when they’re trying to predict what’s going on and how to adapt and adjust as the world does?
Patrick Luce: Yeah, so I would say we’ve hit on a few of ’em, right? The three Bs of business, backlogs, bookings, billings, and just how that relates to the overall macro-economy. Corporate finances is obviously something that we’ve talked about already too, cash on hand profitability, things like that. But we’ve mentioned the consumer and so I’d love to talk about hard data from the consumer because the consumer health is what really is fundamental to growing the US economy ’cause we are such a consumer driven economy. We can look at the financial health of the consumer and say, how are they doing right now? I know a lot of the sentiment is like, things are terrible. We are uncertain about the overall economic climate, so we don’t wanna spend our money. Yet that’s not quite what we’re seeing. We can look at retail sales and say, no, we absolutely are spending our money. We can look at the credit card situation. I know the really popular headline is, the US credit card balance has high levels. Yeah, that’s absolutely true, but that statement’s almost always true, right? We are almost always at record high levels of credit card debt every single month.
The reality is, what is our ability to service that credit card debt? We have seen a rise in credit card delinquency rates. Starting in 2022 as interest rates started to really ratchet upwards. They’ve since really started to plateau, and that rise lasted all the way through 2024. But that plateau is occurring around 3% of a credit card delinquency rate, which when you compare that to history, say preGreat Recession, which was 5%. So yes, things are getting worse but kind of peeking out at a much lower level than what we saw before a great financial crisis.
And then we can talk about the wage environment. We can talk about the employment environment and say that things are still looking decent there. We’re not saying things are all rosy and peachy. I try to say this and emphasize this all the time, Jeremy and I, we are macroeconomists. We zoom out at a 30,000 foot level and we look at data very unemotionally. We are robots, we have no friends, no fun. We are robots, but that’s ultimately what we’re doing is zooming out. I know there’s a lot of bifurcation within the economy between low wage earners and high wage earners, and that’s all a bit more in the weeds. So when we zoom out for the overall macro economy, things are looking okay from a consumer standpoint, not an A+ by any means, but, thinking about the report card C to B. Maybe as Jeremy says, Cs get degrees.
Jeremy Bess: Cs get degrees.
But do they get hired is the question?
Jeremy Bess: I think that’s the key though, is if we think, you’re telling me that consumer’s an A, a C, or a B. But we are coming off of this huge growth that happened in the US economy a couple years ago. We’ve started to unwind that growth and in many markets we went negative. And now we go, okay, where are we? That’s way different than other recessionary periods where, on the backside of the business cycle when we were approaching the bottom the consumer was a D or an F. If you think about the Great Recession, you’re getting kicked outta school.
So I think it’s very different. Context is key. It’s why we were supporting that this backside of the business cycle is not gonna be as bad. The consumer’s in a very different position. and now we’re starting to say, where are we going? That linear planning or linear thinking, if that’s what we’re gonna be doing as leaders, I think that will get us in trouble. If we go, 2024 we were swimming upstream. 2025 really hasn’t been much better. I’m gonna be planning for that in 2026 and 2027, and I’m gonna sit there and say, geez, that’s multiple years decline or swimming upstream if that’s what you wanna call it. That’s usually unlikely in the US right?
We would likely be more closer to the bottom, so I think context is key. The consumer being at a C or a B in the backside of the business cycle is actually a pretty good feat.
Yeah, that’s actually a good reflection and a good lens on this ’cause I think you’re right. From a chemical industry perspective, people are saying this is the longest down cycle that we’ve seen and yet people also recognize, as you’ve talked about, the peak was in 2021 or 2022, when it far exceeded what a normal growth would be because we had COVID, and the post COVID effects that really energized industry, changed up supply, demand, etcetera. Then people would say, we’ve settled down. Now, again, we’re in a bit of a tempered market, I think a bit oversupply in certain places. But then there’s a lot of companies I talk to that say it’s a pretty good year.
Jeremy Bess: Yeah.
So I think it’s the same as the consumer sentiment, right? Much like you say there’s a bifurcation perhaps in the market. Some are saying, oh, this is horrible. And certainly whenever I go to the grocery store and I’m like, how is this possible? I’ll tell you the one that really kills me, the cost of soda, Coke, Pepsi, what have you. I’m like, what the heck. One of my sisters works for Keurig Dr. Pepper, and I’m like, are you kidding me on these prices? She’s like, that’s what it is. So I guess to me that’s one of those, kids drink water. But, I think it goes with this whole what we feel and see. And think that people maybe say, I’m cutting my spending and then the real data shows I’m not cutting my spending, I’m and buying and doing. And I think that’s true. So I think separating sentiment from fact, and story from fiction becomes really critical.
Jeremy Bess: The second quarter results are coming out, the week of the 28th of July. But if we maybe zoom past that one. GDP is likely to come in pretty positive. The Atlanta Fed is already suggesting that too. But if we think about third quarter, where you have this kind of flip flopping inventory from imports and all of this stuff, it could muddy up those results as we head in the third quarter, which all of a sudden is gonna increase that whole probability of recession happening again. But I want everyone to be zooming in on the US consumer expenditures. That’s gonna be the important piece to look at. As of now, year over year gross, we’re still positive. The first quarter was still more positive than the previous year, things were looking pretty good. I think we just need to focus in on that as reading between some of the noise that we’re hearing in those headlines. We might have a lot of that volatility through the third quarter of this year as well.
Right. If there was one thing that as a leader I should be looking at, and I know you’re gonna tell me it’s not one thing ’cause it’s a basket of things, but that’s okay. I’m still gonna ask for one thing I should be paying attention to. What would it be?
Patrick Luce: There’s a million things. The one thing that I will keep a pretty strong eye on is the bond market. Bond market provides a really good and long insight into the risk of the US economy. If you’re thinking about long-term business planning, what the bond market does and says tends to be a core reflection. Even when we look at the policy standpoint, the bond market has seemed to circumvent some of the trade conversations. It seems like folks and the government folks and the businesses listen to the bond market. So I think we all should be keeping an eye on the interest rates and the yield curves and what that means out into the future for 2026 into 2027.
Awesome. All right, Jeremy, same for you. One thing.
Jeremy Bess: I’m gonna piggyback off that and say that’s a very similar market or leading market to take a peek at. I know we yell, what’s the Fed doing? How many interest rate drops are there gonna be? And maybe we’ll get one this year. But actually bond market’s doing and they are in the market saying, how are we thinking about risk in the future? That is actually what matters to the consumer a lot more. You think about mortgages, they’re not tied to the federal funds rate necessarily. They’re more tied to the 10 year bond, right? So you want mortgages to drop. Don’t be looking at what Ron Powell’s doing. Look at what the bond market’s doing.
We could drop interest rates and not see our 10 year debt drop by as much. That’s because maybe the market’s saying, hang on, the US is still more risky. And then that has a lot to do with many other things, but we’re keeping a close eye on that because as of right now, interest rates being more elevated, then that’s then maybe a miss. We had last year being more elevated than we thought. This year could be some downside pressure, not just in 2026, but actually beyond that. So that’s more of a concern for us.
Awesome. Alright, and I’m gonna do my final question, which I like to ask the leaders and the guests on the podcast. Which is, what advice would you give if you look back on your career, if you were advising yourself as you enter the job market, or if you’re advising a young professional entering the job market that frankly wants to be doing what you’re doing, but wants to understand how to navigate unpredictability? For someone that wants to be an advisor to all the leaders that you guys are advisors to, what piece of advice would you give?
Patrick Luce: I’ll take a stab at that. I think, again, there’s a million things that we could say, but as a young professional, I know I went through this myself. It’s very easy to allow yourself to be tugged and pulled in a million different directions and it can seed some doubt in your own analysis. It can seed some doubt in your own kind of trajectory and what you’re anticipating, what you’re planning for, what your analysis says. So ultimately, just be confident in what you’re doing. Not without reason, right? Have analysis, be able to back it up. But if you have done good and sound work that you believe has been stress tested, and has been reviewed, and all these things. Be confident in what you’re doing because I think that’s how you can provide the best sense of clarity.
Jeremy and I work a lot with business leaders and us two basically do the two handed economist thing without real numbers, real data, real analysis or being allowed to be pulled in different directions is not advising, it’s not helping. We need to be clear and direct and good, planning for what we anticipate. So that’s my advice.
I love that. Very cool. Jeremy, how about you?
Jeremy Bess: It’s actually not just something I’d tell myself back in the day. It’s maybe something I’d tell myself even just yesterday. We’re all still learning. I’ve had good mentors to help me with these things. The idea of celebrating the wins or the highs. Are the highs too high or the lows too low? I am the latter the lows are low. So when something happens, I think it’s the end of the world. I know I was optimistic all day, but when I do something wrong or there’s just negativity happening in the work I’m doing or so on and so forth. I think it’s the straw on the camel’s back, it’s just gonna break everything. All of it’s gonna fall apart. I’m sure we all do this, where we think this is the biggest issue ever and then two weeks later, I don’t even remember what I was thinking about.
Things work themselves out or those lows actually turned into wins. Having a little bit of confidence and faith that those things will play out in your work. Ideally you stress test these things, you figured that out. You have confidence that you can work yourself out. It makes sleeping at night better. But most importantly, when you’re talking about running a team or a company, you’re leading by example. You’re less stressed out. You’re less reactive and I think that helps. So I think just trying to not think the lows are so low is an important piece.
Awesome. Alright guys, Patrick and Jeremy, Thank you. I really appreciate your insights.
Jeremy Bess: Thank you. And we’ll look forward to seeing you at The Chemical Summit.
I know I can’t wait. That’s gonna be super exciting. September 30th and October 1st in Houston. As always, thanks for listening today. Keep following, keep sharing, and we will talk with you again soon.
About Jeremy and Patrick:
Jeremy Bess
Often regarded as a thought leader in macroeconomics, Jeremy offers clients insight into future expectations on topics that matter most to them. He helps set their course with a plan grounded in concrete data and analysis. This involves specific ad-hoc projects, such as analyzing the impact of a one-time asset implementation and delivering presentations to policy makers, companies, and trade associations. Drawing on his expertise in various sectors, he translates economic trends into actionable advice.
Jeremy is a keynote speaker who travels across North America. One of his standout skills is keeping the energy up during presentations. Let’s be honest—economist keynotes often get a bad reputation as the perfect time to check emails or make phone calls. But he’s heard that his presentations are so lively, people actually look forward to them and make sure not to miss a minute!
When he’s not working as a managing economist, Jeremy’s an enthusiastic golfer who always packs extra sleeves of golf balls for his outings—he’s passionate about golf but isn’t necessarily the most skilled player! Fortunately, he keeps his spirits high and his laughter loud.
Patrick Luce
Patrick brings his reputation for being a thought leader to his role as a managing economist. With expertise in various sectors, he provides an unbiased, data-driven perspective on economic trends to help clients gain confidence in their decisions—even amidst economic headwinds and tailwinds that are out of their control.
What sets Patrick apart? He has a unique knack for crafting cohesive, compelling narratives derived from complex economic data. He delivers engaging keynote presentations to government entities, companies, and trade associations. Specializing in distilling intricate economic concepts into clear, actionable insights, he makes them accessible and engaging for a diverse audience—he’s also adept at building cohesion and fostering engagement among teams and other interested parties.
When he’s not working with data and clients, Patrick loves traveling and enjoys the discovery of new culinary adventures